The DOL today published the Final Rule implementing the $15 per hour minimum wage for federal contractor workers who work on or in connection with covered contracts, which President Biden authorized by in Executive Order 14026. Building on former President Obama’s Executive Order 13658, President Biden in April 2021 issued the Order and the DOL published a Proposed Rule in July 2021.
The Order applies to “new contracts” on and after January 30, 2022. However, the term “New Contract” has been expanded and applies to:
Extensions or renewals of existing contracts or contract-like instruments; and exercises of options on existing contracts or contract-like instruments on or after January 30, 2022.
Thus, the federal government may exercise an option in an “old” contract not subject to the $15 rate which would make the contract subject to the new $15 wage requirement.
Contracts resulting from solicitations issued before January 30, 2022 and entered into on or between January 30, 2022 and March 30, 2022 are exempted. “However, if such a contract is subsequently extended or renewed, or an option is subsequently exercised under that contract, …” the $15 wage will apply.
Recall, also, that the $15 minimum wage applies only to certain types of contracts:
Procurement contracts for construction covered by the Davis-Bacon Act(DBA), but not the Davis-Bacon Related Acts;
Service Contract Act (SCA) covered contracts;
Concession contracts;
Concession contract means a contract...
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